Source: Wine Country Consultants
To bring clarity, Wine Country Country Consultants looked to one of the industry's most respected financial analysts: Rob McMillan, EVP & Founder of the Wine Division at Silicon Valley Bank. His take cuts straight through the noise.
The Market Is Shifting—But Not in the Way Most Expect
McMillan emphasizes that much of the public conversation is misaligned with reality.
“Directionally, most people misunderstand the road signs. The issue isn’t foreclosures like it’s residential homes… You won’t see a flood of those.”
Instead, the real indicator is more subtle: an increase in off-market listings. Properties are quietly being offered rather than publicly listed, signaling owners exploring options before stress becomes visible.
A Slow-Moving Correction: How We Got Here
This recalibration didn’t begin overnight.
Central Valley: The First Flashpoint
The shift began in 2017, when consumer demand for wines under $12 started to decline. The Central Valley was hit first, but post-Covid adjustments helped the region adapt—Fresno is now well ahead of the curve.
Lodi & Coastal Regions Now Feeling the Pressure
As volume demand falls further, the ripple has moved into Lodi, impacting growers significantly this year.
Premium coastal regions felt the first wave last harvest. Now, more vineyard owners are asking deeper questions about long-term strategy and viability.
Why This Correction May Take Longer Than Expected
Growers are famously resilient—and determined.
Many don’t have alternative crops, making vineyard removal a difficult choice. Instead, many are hoping the market corrects itself, which slows the reset even further.
Some growers entered this harvest without full contracts and have since exhausted savings. These producers are the ones now seeking options, clarity, and guidance.
Buyer Beware: The Most Common Mistake
McMillan cautions buyers against the tempting logic of a down market:
“This isn’t about asset values today. You have to have a plan for the grapes… Don’t buy and hope. It won’t work.”
A vineyard purchase is only a deal if you know:
- what you’re going to produce,
- who the consumer will be, and
- what price points wineries will pay in the future.
Without a plan, even a “can’t-pass-it-up” deal can quickly turn into a burden.
Opportunity Exists—But Only for the Informed
Timing the bottom of a market is notoriously complicated. But for prepared buyers, downturns can be the foundation of exceptional long-term success.
“You could find the best deal of your life and make a fortune, but only if you know what and how to sell.”
In other words, surround yourself with experienced advisors and align every purchase with a long-term strategy, not short-term optimism.
American AgCredit: A Clear Market Snapshot
To add perspective, American AgCredit notes:
- The grape and vineyard markets are still searching for bottom.
- Near-term improvement is unlikely due to broader macroeconomic challenges.
- Premium and luxury tiers remain the strongest, and should outperform over the long term.
The smart money is watching these segments closely.
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